Signs that Sky will go mobile?

Raising the bar

Why would Sky suddenly get aggressive about letting UK cable viewers take Sky TV programs? Could it be something to do with a plan to go quad-play?

The report which causes this alarm comes from Media Week, which reports that although Sky is obliged (by UK regulations) to make its programming available to cable operators, it is suddenly setting a higher bar on the price to be paid. Media Week reports:

"Whereas Sky normally goes into negotiations to win, it’s now going in to kill." And it adds: "There is speculation that Sky may threaten to withdraw channels such as Sky One from the cable platform if it does not get what it wants from negotiations."

However, as Media Week quickly added: "Sky would lose three million potential viewers to its ad sales efforts if it did."

Speculation about a Sky Mobile Phone MVNO has been rumbling on for some time; Big Picture On Advertising, for example, ran a forecast back in April 2005, when Dawn Airey previewed Sky Mobile, broadcasting Sky programs to mobile phones:

We can expect to see Sky on a phone soon. But we wonder whether we’ll see Sky as a major player in mobile – why shouldn't’t they be an MVNO? They have a huge customer base and a strong brand - and given the profits to be made from discount telephony they should be able to make a few dollars too.

One huge advantage of having a Sky mobile brand would be the opportunity to use the mobile as the back channel - just by linking the mobile number with a subscribers set top box - to respond to votes, request information from advertisers etc. Much faster than the red button and much more flexible.

Easynet -before it was taken over by Sky - was well aware of the value of mobile in advertising, as this extract from its corporate newsletter shows, quoting market research chief Martyn Cole at Microsoft:

"The 17 per cent of retailers which are not planning to invest should consider how long they can remain competitive, in a market where use of mobile technology is now the norm," Cole said.

The latest smoke-signals show that Sky has just launched what Media Week described as "a massive marketing campaign to promote its triple-play bundle of broadband, TV and telephony." Its so-called See, Speak, Surf, claims to undercut NTL on similar products by £10 per month.

Against that, conventional mobile operators aren't inspired by business in the UK, where everybody who wants a phone already has one.

However, the market is diffusing. Everybody in one corner of the telco field wants to be in the other three; voice, broadband, mobile and TV, and the last year has seen expansion by all the major players.

The question holding Sky back will be a simple one: will it get more leverage from having its own mobile phone brand, or from working through all the others?

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